Police Officers Retirement System Member Handbook
Fiscal year 2019
Police Officers Retirement System Member Handbook
Table of contents
General information ................................................. 2
Membership and enrollment ................................... 2
Class Two and Class Three membership ............ 3
Employee and employer contribution rates ...... 3
Member compensation limit ............................. 3
Interest on your PORS account .......................... 3
Correlated systems ................................................... 3
Designating beneficiaries for your account .............. 4
Online access to your PORS account ........................ 4
Purchasing additional service credit ......................... 5
Types of service ........................................................ 5
Transfer from SCRS to PORS .............................. 5
Public service ..................................................... 6
Educational service (K-12) .................................. 6
Military service ................................................... 6
Leave of absence ................................................ 6
Workers’ compensation ..................................... 7
Previously withdrawn PORS service ................... 7
Non-qualified service ......................................... 7
State ORP service ............................................... 7
In-service death benefits .......................................... 7
Active member incidental death benefit ........... 7
Accidental Death Program ................................. 8
Retirement account benefits ............................. 8
Disability retirement benefit .................................... 9
Who may apply? ................................................ 9
How to apply ...................................................... 9
Acknowledgement of receipt ............................. 9
Processing the claim ........................................ 10
Effective date of disability benefit ................... 10
Continuing disability review ............................. 10
Returning to employment while receiving a
disability retirement benefit ............................ 10
Leaving before retirement ...................................... 11
Request a refund .............................................. 11
Leave funds on deposit .................................... 12
Service retirement .................................................. 12
When to apply .................................................. 12
Eligibility ........................................................... 12
Retiree health insurance eligibility................... 13
Average final compensation ............................ 13
Estimated benefit ............................................. 13
Service retirement benefit calculations ................. 14
Class Two members ......................................... 14
Class Three members ....................................... 14
Payment options at retirement .............................. 15
Option A ........................................................... 15
Option B ........................................................... 15
Option C ........................................................... 15
Choosing Option B or Option C ........................ 15
Approximate amount of Option A monthly
benefit at retirement ....................................... 17
Post-retirement information .................................. 18
Monthly benefit payments .............................. 18
Taxes ................................................................ 18
Benefit adjustments ......................................... 18
Non-working retired member incidental death
benefit .............................................................. 19
Returning to covered employment .................. 19
Earnings limitation ........................................... 19
Employment status .......................................... 19
Working 48 continuous months ....................... 20
Working retired member incidental death
benefit .............................................................. 20
Working retired member contribution rate ..... 20
Beneficiary and payment option changes ........ 20
More information ................................................... 21
Police Officers Retirement System Member Handbook
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General information
The South Carolina Police Officers Retirement
System (PORS) is a defined benefit retirement plan
administered by the South Carolina Public Employee
Benefit Authority (PEBA) for certain public safety
and other employees of state agencies, public
school districts, public higher education institutions
and other local subdivisions of government that
have joined PORS. This handbook provides a general
introduction to PORS and its benefits.
Membership and
enrollment
Your employer will initiate the retirement
enrollment process. You will need to provide a valid
email address to your employer. Then, you will
make your plan election when you respond to the
Retirement Plan Election email you receive from
PEBA.
You have 30 days from your date of hire to make
your decision. If you do not make a selection within
that time period, you will automatically become a
member of PORS.
Membership is mandatory as a condition of your
employment with a covered employer unless you
are in a position or classification of employment
specifically exempted from membership by statute.
Certain classifications have the option to elect non-
membership within 30 days from their date of hire.
Your employer should let you know if your
employment falls into one of these categories.
Police officers, peace officers, firefighters, coroners,
magistrates and probate judges are eligible for
membership in PORS under the following
circumstances:
Police officers A police officer is defined as
a person who is required by the terms of his
employment to give his time to the
preservation of public order; protection of
life and property; and the detection of
crime in the state. Police officers must also
earn at least $2,000 per year and devote at
least 1,600 hours per year to this work.
Coroners and deputy coroners Coroners
and deputy coroners in a full-time,
permanent position who meet the above
requirements are also considered police
officers.
Peace officers A peace officer is a person
who is employed and certified by the S.C.
Department of Corrections, the S.C.
Department of Juvenile Justice or the S.C.
Department of Mental Health and has the
status of a peace officer under Section 24-1-
280 of the South Carolina Code of Laws.
Peace officers must also earn at least
$2,000 per year and devote at least 1,600
hours per year to this work.
Firefighters A firefighter is a person who
gives his time to prevention and control of
property destruction by fire. A firefighter
must also earn at least $2,000 per year and
devote at least 1,600 hours per year to this
work.
Magistrates Magistrates appointed
pursuant to Section 22-1-10 of the South
Carolina Code of Laws participate in PORS.
Probate judges Elected probate judges may
choose to participate in PORS or they may
choose to participate in the South Carolina
Retirement System (SCRS).
These judicial members of PORS are not subject to
the 1,600-hour and $2,000 per year requirements.
Your employer may also be required to submit an
affidavit certifying that your position qualifies for
participation in PORS.
Your PORS membership starts when you earn
compensation from a covered employer and make
contributions to your PORS retirement account. You
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are considered an active member if you are working
in a PORS-eligible position for a PORS-covered
employer, earning service credit and making regular
contributions to a PORS retirement account, and
you have not retired or terminated from covered
employment. You must be an active member to be
eligible for most of the benefits described in this
handbook.
Currently, there are two classes of membership:
Class Two and Class Three.1 Class Two members are
generally employees who currently have earned
service credit in PORS or a correlated retirement
system for a period of service prior to July 1, 2012.
Class Three members are those members who do
not currently have earned service in PORS or a
correlated retirement system for a period of service
prior to July 1, 2012. A period of withdrawn service
or a period of participation in the State Optional
Retirement Program (State ORP) does not count
toward the earned service credit used to determine
whether a member is Class Two or Class Three
unless the member has completed a service
purchase to establish earned service credit in PORS
for the period of withdrawn service or State ORP
participation.
Employee and employer
contribution rates Members of PORS contribute 9.75 percent of their
gross pay, tax-deferred, into their PORS retirement
accounts. Employer contribution rates to the
system are set by the PEBA Board each year based
upon the results of the annual actuarial valuation of
the system and statutory requirements.
1 Class One membership is no longer applicable. Please contact PEBA if you have any questions about Class One benefits.
Member compensation limit The Internal Revenue Service (IRS) imposes a
federal compensation limit under the Internal
Revenue Code (IRC), Section 401(a) (17). This limit,
also referred to as a cap, is placed on the amount of
annual compensation which may be taken into
account for purposes of calculating pension
contributions. Employees who became members of
PORS or SCRS, or participants in State ORP prior to
January 1, 1996, are not subject to the annual
compensation limit. Employees who became
members or participants in the plans on and after
January 1, 1996, are subject to the compensation
limit as adjusted by the commissioner of the IRS for
increases in the cost of living in accordance with
Section 401(a)(17) of the IRC. The calendar year
2018 compensation limit (cap) is $275,000.
Compensation in excess of this limitation is not
subject to retirement contributions
Interest on your PORS account Your active PORS account earns 4 percent interest
compounded annually on your balance as of the
previous June 30 until you retire or your account
becomes inactive. An account is considered inactive
when no contributions have been made in the
preceding fiscal year and no other active, correlated
system or State ORP account exists.
Correlated systems
PEBA administers several other defined benefit
retirement systems for public employees and
officials. Two of these other systems, the South
Carolina Retirement System (SCRS) and the General
Assembly Retirement System (GARS), are correlated
systems with PORS. If you have contributions in
more than one of these correlated retirement
systems, your service credit is maintained
separately within each system; however, your
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service credit is added together to determine your
eligibility for a retirement benefit. Although this
service is combined for eligibility purposes, the
amount of your benefit from each system is still
calculated based only upon your service credit in
that system.
For example, if you are a PORS member with 10
years of service credit and were previously a
member of SCRS with 15 years of service, you would
be considered to have 25 years of service credit for
the purposes of determining your eligibility for a
retirement benefit.
Designating beneficiaries
for your account
The retirement benefits administered by PEBA also
offer options for you to help provide for your
survivors in the event of your death. As an active
member, you have the option to designate three
types of beneficiaries for your retirement account:
Primary beneficiaries for your in-service
death benefit (see Page 7) or refund of
contributions (see Page 7). Multiple
beneficiaries would share equally in a
survivor monthly benefit;
Contingent beneficiaries in case of death of
the primary beneficiaries. All primary
beneficiaries must be deceased before any
contingent beneficiaries will be paid; and
Incidental death benefit beneficiaries (see
Page 7).
You may name your estate as a beneficiary for your
account; however, monthly benefit payments
cannot be paid to an estate. As an active member,
you may change your beneficiaries at any time
before retirement.
Online access to your
PORS account
Member Access is PEBA’s online portal that allows
PORS members to view and update their personal
information on file with PEBA. It's safe, secure and
available anytime from anywhere you have internet
access.
Active members may:
View their designated beneficiary
information;
View their current service credit;
View and print their member statement;
Change their address;
Calculate a benefit estimate;
Calculate an unofficial cost estimate to
purchase service credit;
Submit a service purchase request;
Submit and view the status of their refund
application; and
Submit and view the status of their service
retirement application.
Retired members may:
Change their address;
Change their tax withholdings;
View and print a 1099-R form;
View and print an benefit verification letter;
View and print an insurance premium
letter;
View their current payment method;
Change their payment method from paper
check to direct deposit; and
Modify an existing direct deposit account or
add an additional direct deposit account.
Inactive members may:
View and print their member statement;
and
Change their address.
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If you haven’t registered for Member Access, you
may do so by selecting the Member Access button
at www.peba.sc.gov. From there, select the Register
Now button to start the process.
Purchasing additional
service credit
Active members may establish additional service
credit for various types of previous employment
and leaves of absence, and up to five years of non-
qualified service, which is a type of service credit
not associated with any specific employment.
Generally, a member on leave without pay from a
covered employer is not eligible to establish service
credit of any type.
You may establish service credit through a lump-
sum payment, a pre or post tax installment service
purchase or a tax-deferred rollover from an
Individual Retirement Account (IRA), a 401(k) plan,
a 401(a) eligible plan, a 403(b) plan or a 457 plan.
The interest rate for an installment service purchase
is calculated at the prime rate plus 2 percent.
Installments initiated July 1, 2018, through June 30,
2019, will be calculated at 6.75 percent. The
interest rate is fixed for the term of the installment.
You may establish each type of service credit once
within a fiscal year. If you are establishing service to
meet retirement eligibility, contact the Customer
Contact Center at 803.737.6800 or 888.260.9430 for
more information. Payment for service purchases
must be made in full prior to your retirement date
or termination from employment. If you are
terminated from covered employment within one
year of retirement eligibility, you have five business
days after the date of termination to purchase any
service credit that you are otherwise eligible to
purchase. If you previously established service
credit for periods of part-time service or previously
earned service credit for periods of part-time
service prior to July 1996, you may be eligible to
establish additional service credit at an additional
cost. Please contact the Customer Contact Center at
803.737.6800 or 888.260.9430 for more
information.
One factor used to determine the cost of most
types of service purchases is your career highest
fiscal year earnable compensation. This includes any
salary earned during a period of withdrawn service,
regardless if the withdrawn service has been
established through a service purchase. The cost to
purchase periods of less than one year will be
prorated. You may not establish PORS service credit
for a period of service, other than military service,
for which you may also receive a retirement benefit
from another defined benefit retirement plan or for
a period of service for which you already have credit
in PORS. You also may not establish PORS service
credit if doing so would violate Section 415 or any
other provision of the Internal Revenue Code.
A Class Three member who purchases a period of
withdrawn service or State ORP participation for
any period of covered employment rendered prior
to July 1, 2012, will revert to Class Two
membership.
Some types of purchased service may not be used in
determining eligibility for retiree health insurance.
If you are covered by the state’s employee health
insurance program, contact the Customer Contact
Center at 803.737.6800 or 888.260.9430 for
eligibility information. If your employer does not
participate in the state’s employee health insurance
program, contact your employer for information
about insurance in retirement.
Types of service
Transfer from SCRS to PORS If you are an active member of PORS, you may
transfer your non-concurrent SCRS service credit to
your PORS account by paying 5 percent of your
current earnable compensation for each year
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transferred. Your SCRS contributions plus interest
and non-concurrent service credit are then
transferred to your PORS account. SCRS earned
service that is transferred to PORS is considered
earned service for the determination of the PORS
minimum service requirement for benefit eligibility.
Earnings that are associated with the service that is
transferred from SCRS to PORS are not included in
the calculation of your average final compensation.
Public service As an active member, you may establish PORS
service credit for any period of paid public service
as an employee of the government of the United
States, a state or political subdivision of the United
States by making an actuarially neutral payment to
PEBA. The cost calculation is based in part on your
current age and service credit, as well as your
career highest fiscal year earnable compensation at
the time PEBA receives your service purchase
request. The cost, which is determined by PEBA’s
independent actuary, will not be less than 16
percent of your career highest fiscal year earnable
compensation for each year purchased.
Educational service (K-12) As an active member, you may establish service
credit for any period of paid classroom teaching
consisting of grades kindergarten through 12 in a
public, private or sectarian school by making an
actuarially neutral payment to PEBA. The cost
calculation is based in part on your current age and
service credit, as well as your career highest fiscal
year earnable compensation at the time PEBA
receives your service purchase request. The cost,
which is determined by PEBA’s independent
actuary, will not be less than 16 percent of your
career highest fiscal year earnable compensation
for each year purchased.
Military service As an active member, you may establish up to six
years of service credit for any period of military
service for which you do not already have service
credit in SCRS, PORS or GARS by making an
actuarially neutral payment to PEBA. This includes
service in the United States Army, Navy, Marine
Corps, Air Force, Coast Guard, Select Reserves and
the Army or Air National Guard. The cost calculation
is based in part on your current age and service
credit, as well as your career highest fiscal year
earnable compensation at the time PEBA receives
your service purchase request. The cost, which is
determined by PEBA’s independent actuary, will not
be less than 16 percent of your career highest fiscal
year earnable compensation for each year
purchased.
Your discharge from service must be under
conditions other than dishonorable. Under
guidelines set forth by the Uniformed Services
Employment and Reemployment Rights Act
(USERRA), you may also arrange in advance with
your employer to continue contributing to your
account while on active duty military leave or make
the contributions after returning from military leave
within a period three times longer than your
military leave, but not more than five years.
Leave of absence Active members on an employer-approved leave of
absence who return to covered employment within
four years may purchase service credit for the
employer-approved leave period for which they do
not already have service credit, up to a maximum of
two years per leave of absence. The leave of
absence must be with an employer covered by one
of the retirement systems administered by PEBA.
The cost calculation is based in part on your current
age and service credit, as well as your career
highest fiscal year earnable compensation at the
time PEBA receives your service purchase request.
The cost, which is determined by PEBA’s
independent actuary, will not be less than 16
percent of your career highest fiscal year earnable
compensation for each year purchased.
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Workers’ compensation You may establish service credit for a period while
on leave of absence and receiving workers’
compensation benefits. The cost is based on
contributions plus interest using your earnable
compensation at the time of injury. You may also
arrange in advance with your employer to continue
contributing to your account while you are receiving
workers’ compensation benefits.
Previously withdrawn PORS
service If you left employment and received a refund of
your contributions plus interest from PORS, you
may re-establish this service upon returning to
active membership. You must repay the amount
you withdrew plus interest to the date your request
is received. Previously withdrawn earned service
that is re-established in PORS is considered earned
service for the determination of the PORS minimum
service requirement for benefit eligibility. Please
note that earnings associated with a re-established
withdrawal will be considered for possible inclusion
in the calculation of a member’s average final
compensation. A Class Three member who
purchases a period of withdrawn service for any
period of covered employment rendered prior to
July 1, 2012, will revert to Class Two membership.
Non-qualified service Active members who have five or more years of
earned service credit may establish up to five years
of non-qualified service by making an actuarially
neutral payment to PEBA. The cost calculation is
based in part on your current age and service credit,
as well as your career highest fiscal year earnable
compensation at the time PEBA receives your
service purchase request. The cost, which is
determined by PEBA’s independent actuary, will not
be less than 35 percent of your career highest fiscal
year earnable compensation for each year
purchased.
State ORP service Active members may purchase service credit for
their years of participation in the State Optional
Retirement Program (State ORP) by making an
actuarially neutral payment to PEBA. The cost
calculation is based in part on your current age and
service credit, as well as your career highest fiscal
year earnable compensation at the time PEBA
receives your service purchase request. The cost,
which is determined by PEBA’s independent
actuary, will not be less than 16 percent of your
career highest fiscal year earnable compensation
for each year purchased.
State ORP participation that is established in PORS
is considered earned service for the determination
of the PORS minimum service requirement for
benefit eligibility. Please note that earnings
associated with established State ORP participation
will not be considered for possible inclusion in the
calculation of a member’s average final
compensation. A Class Three member who
purchases a period of State ORP participation for
any period of covered employment rendered prior
to July 1, 2012, will revert to Class Two
membership.
In-service death benefits
Active member incidental
death benefit If, as an active member, you die in service with at
least one year of service credit and your employer
provides incidental death benefit coverage, a
payment equal to your current annual earnable
compensation will be paid to your beneficiary. If
your death results from a job-related injury, the
one-year requirement is waived.
Amounts paid to your beneficiary are subject to
ordinary federal and state income taxes. It is up to
your designated beneficiary to request that state
taxes be withheld from the payment. PEBA is
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required to withhold federal taxes of 20 percent on
the incidental death benefit payment unless your
designated beneficiary rolls over the money into
another qualified retirement plan. A designated
beneficiary who is a spouse may roll over the
incidental death benefit payment into an IRA, a
401(k) plan, a 401(a) eligible plan, a 403(b) plan or
some 457 plans. The South Carolina Deferred
Compensation Program’s 457 retirement plan does
not currently accept rollovers from your SCRS
account.
A non-spousal beneficiary may roll over the
incidental death benefit payment into an inherited
or beneficiary IRA only.
Your designated beneficiary should check with an
accountant or a tax advisor about his tax liability, or
visit the IRS’s website at www.irs.gov and the
website for the tax agency in the state in which he
resides. In South Carolina, visit the South Carolina
Department of Revenue’s website at
https://dor.sc.gov.
State agencies and public school districts
automatically provide incidental death benefit
coverage to their employees; however, coverage is
optional for other employers. If an employer elects
to provide incidental death benefit coverage for its
employees, the employer must pay the required
contribution rate for the coverage.
Accidental Death Program This program provides a survivor benefit if your
employer is covered and you die as a result of an
injury by external accident or violence incurred
while undergoing a hazard peculiar to your
employment while in the actual performance of
duty, without willful negligence on your part. An
accidental death benefit payment will be made
monthly to your surviving spouse for life. If you
have no spouse or your spouse dies before your
youngest child has reached age 18, the monthly
benefit is divided equally among the surviving
children, each of whom will continue to receive a
monthly benefit until reaching age 18 or upon
death, whichever occurs first. If you have no spouse
or child under age 18, the monthly benefit will be
paid to your surviving father and/or mother for life.
State agencies automatically provide Accidental
Death Program coverage to their employees;
however, coverage is optional for other employers.
If an employer elects to provide Accidental Death
Program coverage for its employees, the employer
must pay the required contribution rate for the
coverage.
Retirement account benefits If you die in service as an active member, your
designated beneficiary will be entitled to receive a
refund of your employee contributions plus the
interest earned on your account regardless of your
age and years of service credit at the time of your
death.
Your designated beneficiary will be eligible to
choose a monthly benefit instead of a refund of
your employee contributions plus the interest
earned on your account if:
You are a Class Two member with at least
five years of earned service credit and
either have at least 15 years of total service
credit or you are at least 55 years of age at
the time of your death; or
You are a Class Three member with at least
eight years of earned service credit and
either have at least 15 years of total service
credit or you are at least 55 years of age at
the time of your death.
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Disability retirement
benefit
Who may apply Becoming disabled does not automatically qualify
you for a disability retirement benefit; you must file
an application and go through the review process.
You must be in service with a covered employer in
order to file an application for disability retirement
benefits. You are considered in service if you have
not yet retired from PORS and it has not been more
than one year since you were last on the payroll of a
covered employer.
If PEBA does not receive your application while you
are in service, you will not be eligible to receive any
disability retirement benefits from PORS. Retired
members who work for a covered employer are not
eligible to apply for a disability retirement benefit.
In addition to being in service, you must also meet
certain earned service requirements to apply for
disability retirement benefits. If you are a Class Two
member, you must have at least five years of
earned service credit toward retirement unless your
disability is the result of an injury arising out of and
in the course of the performance of your job duties.
If you are a Class Three member, you must have at
least eight years of earned service credit toward
retirement unless your disability is the result of an
injury arising out of and in the course of the
performance of your job duties.
Coordination with other benefits
You may arrange with your employer to make your
retirement contributions through your employer if
your disability requires you to be placed in an
employer-approved leave status while receiving
workers’ compensation benefits. Doing so will
ensure that you continue to earn retirement service
credit during your workers’ compensation leave
period. Do not wait to apply for a disability benefit
until your workers’ compensation claim is finalized.
Many workers’ compensation claims are often
settled after covered employment has ended. If
your disability claim is denied, the continuance of
paying retirement contributions and earning
retirement service credit may be important to your
long-term retirement plans.
How to apply You should file your application for disability
retirement as soon as you become disabled and
while you are still in service with an employer
covered by PORS. Either go to the PEBA website at
www.peba.sc.gov or contact the Customer Contact
Center at 803.737.6800 or 888.260.9430 to obtain a
disability retirement packet. When you file your
disability retirement claim, please complete all of
the forms in the disability retirement packet. You do
not, however, need to include any medical records
from your health care providers. If PEBA receives
your disability retirement application after you have
already retired from PORS or more than one year
after you terminate from all covered employment
under PORS, you will not be eligible to apply for a
disability retirement benefit.
Acknowledgement of receipt If you do not receive notification in the mail
confirming PEBA’s receipt of your application within
10 days, please contact the Customer Contact
Center at 803.737.6800 or 888.260.9430. If you are
eligible for service retirement when you become
disabled, you may apply for a service retirement
benefit and begin receiving a monthly benefit while
awaiting determination of your disability claim. You
will receive only one type of payment, so if your
disability claim is approved, you will need to decide
whether to continue to receive your service
retirement benefit or to begin receiving a disability
benefit. When filing for both service and disability
retirement benefits, please note that your disability
retirement application must be received before
your service retirement date.
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Processing the claim Your medical records will be obtained from your
health care providers by our disability
determination provider and evaluated to determine
the severity and limiting effects of your physical or
mental impairment. The determination to approve
or deny your disability retirement claim is made
after review by a medical board of three physicians.
Please allow a minimum of three months after all
required documentation has been received from
you, your employer and your health care providers
for your disability application to be processed. If
you do not receive notification of PEBA’s decision
within three months, please contact the Customer
Contact Center at 803.737.6800 or 888.260.9430.
If your claim is denied, you will have an opportunity
to appeal the denial. You have one year from the
date of the denial to file an administrative appeal. If
the final agency determination upholds the denial,
you may appeal to the Administrative Law Court.
Effective date of a disability
benefit If your disability retirement claim is approved, the
effective date for your benefit will be the 30th day
after your application is received by PEBA or the day
after your last day on your employer’s payroll,
whichever is later.
The disability retirement benefit will be based upon
your years of credited service projected to age 55 or
25 years of credit, whichever is less, your average
final compensation at retirement and the current
benefit multiplier for service retirement benefits.
However, the annual benefit may not be less than
15 percent of your average final compensation.
Continuing disability review A disability benefit, once approved, may be
discontinued if:
You regain a certain earning capacity; or
Medical evidence indicates that you are no
longer disabled; or
Your disability benefit was not approved
following a continuing disability review.
Periodic medical reexaminations may be required
up to age 55. If PEBA determines that your disability
benefit should cease because of an improvement in
your medical condition, your benefit will stop the
month of your scheduled continuing disability
review or the month of PEBA’s decision, whichever
is later.
Returning to employment while
receiving a disability retirement
benefit If you are under age 55 and receiving a PORS
disability benefit, you should report earnings from
any gainful (public or private) employment to PEBA
annually because there is an earnings limitation for
all employment which is applied on a calendar-year
basis. You may earn the difference between your
adjusted average final compensation (AFC) at
retirement and your disability benefit without
affecting your benefit.
Your AFC may be adjusted each year for inflation for
earnings limitation purposes only. This increase
generally matches the percentage of the annual
increase in the Consumer Price Index for Wage
Earners and Clerical Workers (CPI-W). These
adjustments affect the amount you can earn while
receiving a disability benefit; however, they do not
affect the amount of your benefit. You will receive a
letter each February advising you of how much you
can earn and requesting confirmation of your prior
year’s earnings. You will have to repay any benefits
Police Officers Retirement System Member Handbook
11
you received to which you were not entitled. If you
earn more than the difference between your
adjusted AFC and your disability benefit, your
monthly benefit will be reduced or possibly
canceled. If you return to work with an employer
covered by one of the retirement systems
administered by PEBA and your annual earnable
compensation is equal to or greater than your
adjusted AFC, your disability benefit ceases and you
must become an active member of the system.
After age 55, a disability retiree is subject to the
same earnings limitation as a service retiree (see
Page 19).
Leaving before retirement
If you leave your job and terminate all employment
covered by one or more of the retirement systems
administered by PEBA before you are eligible to
retire, you have two options concerning your
contributions:
Request a refund of your employee
contributions plus the interest earned on
your account; or
Leave your funds in your PORS account.
Your account will continue to accrue
interest until your account becomes
inactive. Your PORS account is considered
inactive when no contributions have been
made to the account in the preceding fiscal
year and no other active, correlated system
or State ORP account exists.
Request a refund If you have terminated all employment covered by
one or more of the retirement systems
administered by PEBA and wish to receive a refund
of your accumulated employee contributions plus
the interest earned on your account, you must
submit a refund request in Member Access or
complete a Refund Request (Form 4101) and return
it to PEBA. You may submit your refund request
immediately upon termination; however, by law,
your refund cannot be paid sooner than 90 days
after your termination, and may not be paid later
than six months after the date of your request. If
you are working for two or more covered employers
and/or contributing to more than one retirement
account (i.e., working two jobs and paying into a
PORS and an SCRS account), you must stop working
in all correlated systems to request a refund from
any account.
If you receive a refund, you forfeit your rights to any
future service retirement or disability benefit.
Employer contributions are not refunded. Instead of
having the refund paid directly to you, you may
choose to roll over the funds into an IRA, a 401(k)
plan, a 401(a) eligible plan, a 403(a) plan, a 403(b)
plan or some 457 plans. The South Carolina
Deferred Compensation Program’s 457 retirement
plan does not currently accept rollovers from your
PORS account.
PEBA is required to withhold federal taxes of 20
percent on the taxable portion of any refund that is
eligible for a rollover but is not transferred directly
into another qualified retirement plan. If you do not
take advantage of a rollover as indicated above and
are under the age of 59 ½ at the time of
distribution, your distribution will not only be
subject to regular income tax, but you may also be
subject to a 10 percent penalty tax on the taxable
portion of your distribution when you file your
income tax return, unless certain exceptions apply.
See Special Tax Rules in IRS Publication 575 and IRS
Form 5329 for more information on this tax penalty
and the exceptions to the penalty.
Be sure to check with an accountant or tax advisor
regarding your tax liability, or visit the IRS’s website
at www.irs.gov and the website for the tax agency
in the state in which you reside. In South Carolina,
visit the South Carolina Department of Revenue’s
website at https://dor.sc.gov.
Police Officers Retirement System Member Handbook
12
Leave funds on deposit When you leave your money in your PORS account,
you retain your years of service credit, which may
be added to any future service you may accrue
should you later become employed in a position
covered by one of the correlated retirement
systems administered by PEBA. Your account will
continue to earn interest until it becomes inactive.
An account is considered inactive when no
contributions have been made to the account in the
preceding fiscal year and no other active, correlated
system account exists. You may apply for a refund
at a later date or apply for a service retirement
benefit upon reaching eligibility. No action is
required if you wish to retain your membership and
leave your funds on deposit, but it is your
responsibility to keep PEBA informed of your
current address as well as any name or beneficiary
changes. You can make certain updates to your
account information through Member Access (see
Page 4 for more information).
Service retirement
A good way to begin the planning process for
retirement is to attend a retirement seminar
offered by PEBA. Sessions are held regionally in the
fall. The seminar schedule and registration
information can be found online at
www.peba.sc.gov/events.www.peba.sc.gov/events
www.peba.sc.gov/events If you are considering
retirement, you may obtain a consultation by
telephone or in person at our office. Simply contact
the Customer Contact Center at 803.737.6800 or
888.260.9430 or visit our office. Visitors are seen on
a first-come, first-served basis.
When to apply You must file an application with PEBA to retire; it is
not automatic. You may file your application as
early as six months prior to your desired effective
date of retirement but no later than 90 days
afterward. We encourage you to file your
application as early as possible. Retirement
applications and other forms are available on the
PEBA website at www.peba.sc.gov/rforms.html, or
you may contact the Customer Contact Center at
803.737.6800 or 888.260.9430 to request these
forms.
If you do not receive notification of PEBA’s receipt
of your application within 10 days after submitting
it, contact the Customer Contact Center at
803.737.6800 or 888.260.9430. Please do not
terminate employment until PEBA has verified
your service credit and you receive written notice
of your retirement eligibility from PEBA. This
notice will be sent to you in the mail and is entitled,
Notification of Retirement Eligibility and Estimated
Benefit. Benefit estimates may be obtained through
Member Access or from PEBA, but are projected
based on information you provide and information
in PEBA’s records. Benefit estimates are subject to
change upon review of your account after PEBA
receives your retirement application.
Eligibility If you meet the following requirements, you are
considered eligible to retire (see Correlated systems
on Page 3 if you have an account in more than one
retirement system).
Class Two members
25 years of service credit on the date of
retirement, five years of which must be
earned service credit; or
Age 55 or older on the date of retirement
with five years of earned service credit.
Class Three members
27 years of service credit on the date of
retirement, eight years of which must be
earned service credit; or
Age 55 or older on the date of retirement
with eight years of earned service credit.
Police Officers Retirement System Member Handbook
13
Retiree health insurance
eligibility The eligibility requirements for a service benefit and
for retiree health insurance are not the same. If you
are covered by the state’s health insurance
program, be sure to read the eligibility
requirements in the Insurance Benefits Guide or
contact the Customer Contact Center at
803.737.6800 or 888.260.9430 for eligibility
information. If your employer does not participate
in the state’s employee health insurance program,
contact your employer for information about
insurance in retirement.
Average final compensation Your average final compensation, commonly
referred to as AFC, is an important part of the
formula used to calculate your retirement benefit.
If you are a Class Two member, your AFC is the 12
highest consecutive quarters2 of earnable
compensation in which you made regular member
contributions and were earning service credit. An
amount up to and including 45 days' termination
pay for unused annual leave at retirement may be
included in your AFC calculation. For an elected
official, AFC may be calculated as the average
annual earnable compensation for the 36
consecutive months before the expiration of the
elected official's term of office.
If you are a Class Three member, your AFC is the 20
highest consecutive quarters2 of earnable
compensation in which you made regular member
contributions and were earning service credit.
Termination pay for unused annual leave at
retirement is not included in the AFC calculation.
2 A quarter means a period January through March, April through June, July through September or October through December.
Estimated benefit One of PEBA’s goals is to start your benefit payment
as soon as possible so that you are not without
income once you terminate employment. To make
this possible, your initial benefit payment does not
include any credit for unused sick or annual leave, if
applicable, nor does it include your final earnable
compensation information. Until all of this
information is received from your employer, you
will receive an estimated benefit.
If you are a Class Two member, after your employer
submits your final earnable compensation
information, which is in the form of quarterly
retirement contributions, PEBA will audit the
retirement contributions for your 12 highest
consecutive quarters of earnable compensation.
Your AFC may be adjusted after the audit if any of
the contributions included in the AFC calculation
were for any payments not considered a part of
your regular earnable compensation base. Your AFC
will also be adjusted according to statute to include
payment for your unused annual leave (see Unused
leave at retirement on Page 14). Your service credit
will also be adjusted to include credit for up to 90
days of unused sick leave.
If you are a Class Three member, you will have
retirement contributions for your 20 highest
consecutive quarters of earnable compensation
audited. You will not receive service credit for
unused sick leave at retirement, nor will payment at
retirement for your unused annual leave be
included in the calculation of your AFC.
As a result of the information received from your
employer and the audit of the contributions for
your highest consecutive quarters of earnable
compensation, your retirement benefit will be
Police Officers Retirement System Member Handbook
14
finalized. The final amount may be less than, or
more than, your estimated benefit.
Service retirement benefit
calculations
Class Two members The four-step formula below is used to calculate
your Class Two monthly benefit based on the
Option A maximum payment plan described on
Page 15.
Step 1: Total your 12 highest consecutive
quarters of earnable compensation and
allowable annual leave payout and
divide by 3.3 This equals your AFC.
Step 2: Multiply the result of Step 1 by 2.14
percent (0.0214).
Step 3: Multiply the result of Step 2 by years,
months and days of service.4
Step 4: Divide the result of Step 3 by 12.
Class Two example
For a Class Two member with 25 years of service
credit and an AFC of $30,000:
1. $30,000 ×0.0214 = $642
2. $642 × 25 = $16,050
3. $16,050 ÷ 12 = $1,337.50
The Option A monthly benefit is $1,337.50.
3 The dollar amount of payment for up to 45 days of unused annual leave paid by a Class Two member’s last employer at retirement may be included before averaging the member’s 12 highest consecutive quarters of earnable compensation. 4 Convert months to days and divide the total days by 360 to determine a decimal equivalent for partial years. For example, 25 years, 2 months and 10 days equals 25 years, 70 days (60
Unused leave at retirement
Annual leave Only an amount up to and including 45 days’ pay for
unused annual leave from a Class Two member’s
last termination payment will be included before
averaging the member’s 12 highest consecutive
quarters of earnable compensation (see Step 1 of
the benefit formula).
Sick leave At retirement, a Class Two member may receive
service credit for up to 90 days of unused sick leave
from the member’s last employer at no cost to the
member (see Step 3 of the benefit formula). This
service credit cannot be used to establish
retirement eligibility. Sick leave is reported by a
Class Two member’s employer after retirement.
One month of service credit is granted for each 20
days of sick leave.
Class Three members The following four-step calculation is used to
calculate your Class Three monthly benefit based on
the Option A maximum payment plan described on
Page 15.
Step 1: Total your 20 highest consecutive
quarters of earnable compensation and
divide by 5. This equals your AFC.
Step 2: Multiply the result of Step 1 by 2.14
percent (0.0214).
Step 3: Multiply the result of Step 2 by years,
months and days of service.5
Step 4: Divide the result of Step 3 by 12.
plus 10). 70 divided by 360 equals .19. This amounts to 25.19 years of service. 5 6Convert months to days and divide the total days by 360 to determine a decimal equivalent for partial years. For example, 25 years, 2 months and 10 days equals 25 years, 70 days (60 plus 10). 70 divided by 360 equals .19. This amounts to 25.19 years of service.
Police Officers Retirement System Member Handbook
15
Class Three example
For a Class Three member who has 27 years of
service credit and an AFC of $30,000:
1. $30,000 × 0.0214 = $642
2. $642 × 27 = $17,334
3. $17,334 ÷ 12 = $1,444.50
The Option A monthly benefit is $1,444.50.
Unused leave at retirement
Class Three members will not receive service credit
for any unused sick leave at retirement and any pay
you receive at termination for unused annual leave
will not be included in the calculation of your
average final compensation.
Payment options at
retirement
There are three monthly benefit payment options
available to you at retirement. Select the option
that best suits your needs. Generally, your payment
option may not be changed once your benefit is first
payable.
Option A
Maximum retiree only monthly benefit
This option provides the maximum monthly benefit
available and will pay you a lifetime benefit based
on your average final compensation, years of
service and a multiplier (0.0214). After your death,
PEBA will return, through a lump-sum payment to
your beneficiary or your estate, the remaining
balance of any member contributions and interest
and any working retiree contributions not
exhausted through receipt of your benefit during
your retirement.
Option B
100% - 100% joint retiree-survivor
monthly benefit
You will receive a reduced (from Option A) monthly
benefit for life. After your death, the same benefit
(100 percent of your reduced monthly benefit,
including granted benefit adjustments) will continue
throughout your beneficiary’s lifetime. If all of your
designated beneficiaries predecease you, your
benefit will revert to Option A, including any benefit
adjustments granted since your retirement date.
You may select Option B only if your designated
beneficiary is your spouse, or you designate
multiple beneficiaries or a sole beneficiary who is
not your spouse and who is within the 10-year age
difference limits allowed by an Internal Revenue
Code (IRC) formula. The non-spousal limits do not
apply if the non-spousal beneficiary is older than
you, or in the case of disability retirement or death
benefits. If, based on the IRC formula, the adjusted
age difference for you and a non-spousal
beneficiary exceeds the IRC limits, Option B would
not be available to you. You would be able to select
Option C, however, with no IRC restrictions.
Option C
100% - 50% joint retiree-survivor monthly
benefit
You will receive a reduced (from Option A) monthly
benefit for life. After your death, one-half of the
benefit (50 percent of your reduced monthly
benefit, including granted benefit adjustments) will
continue throughout your beneficiary’s lifetime. If
all of your designated beneficiaries predecease you,
your benefit will revert to Option A, including any
benefit adjustments granted since your retirement
date.
Police Officers Retirement System Member Handbook
16
Choosing Option B or
Option C If you choose Option B or Option C and name
multiple beneficiaries, after your death your benefit
will be divided equally among those beneficiaries.
The benefit will not change for the remaining
beneficiaries if one beneficiary dies, either before or
after the member dies.
If you select Option B or Option C and all of your
designated beneficiaries predecease you, your
benefit will revert to Option A, effective in the
month following the month the last beneficiary
died. You must notify PEBA upon the death of a
beneficiary.
Police Officers Retirement System Member Handbook
17
Approximate amount of Option A monthly benefit at retirement The information in the table below is based on Option A. Choosing Option B or Option C to provide a future
benefit for beneficiaries will reduce the amount of your monthly benefit.
AFC Years of service
Additional monthly
benefit for each
additional year
5 10 15 20 25 27 30 35 40
$20,000 $178 $357 $535 $713 $892 $963 $1,070 $1,248 $1,427 $36
$25,000 $223 $446 $669 $892 $1,115 $1,204 $1,338 $1,560 $1,783 $45
$30,000 $268 $535 $803 $1,070 $1,338 $1,445 $1,605 $1,873 $2,140 $54
$35,000 $312 $624 $936 $1,248 $1,560 $1,685 $1,873 $2,185 $2,497 $62
$40,000 $357 $713 $1,070 $1,427 $1,783 $1,926 $2,140 $2,497 $2,853 $71
$45,000 $401 $803 $1,204 $1,605 $2,006 $2,167 $2,408 $2,809 $3,210 $80
$50,000 $446 $892 $1,338 $1,783 $2,229 $2,408 $2,675 $3,121 $3,567 $89
$55,000 $490 $981 $1,471 $1,962 $2,452 $2,648 $2,943 $3,433 $3,923 $98
$60,000 $535 $1,070 $1,605 $2,140 $2,675 $2,889 $3,210 $3,745 $4,280 $107
$65,000 $580 $1,159 $1,739 $2,318 $2,898 $3,130 $3,478 $4,057 $4,637 $116
$70,000 $624 $1,248 $1,873 $2,497 $3,121 $3,371 $3,745 $4,369 $4,993 $125
$75,000 $669 $1,338 $2,006 $2,675 $3,344 $3,611 $4,013 $4,681 $5,350 $134
$80,000 $713 $1,427 $2,140 $2,853 $3,567 $3,852 $4,280 $4,993 $5,707 $143
$85,000 $758 $1,516 $2,274 $3,032 $3,790 $4,093 $4,548 $5,305 $6,036 $152
$90,000 $803 $1,605 $2,408 $3,210 $4,013 $4,334 $4,815 $5,618 $6,420 $161
$95,000 $847 $1,694 $2,541 $3,388 $4,235 $4,574 $5,083 $5,930 $6,777 $169
$100,000 $892 $1,783 $2,675 $3,567 $4,458 $4,815 $5,350 $6,242 $7,133 $178
$110,000 $981 $1,962 $2,943 $3,923 $4,904 $5,297 $5,885 $6,866 $7,847 $196
Police Officers Retirement System Member Handbook
18
Post-retirement information
Monthly benefit payments Monthly benefit payments are directly deposited
into your bank account on the last business day of
each month. Electronic distribution of monthly
benefit payments reduces risks and transaction
costs for both benefit recipients and the retirement
plan. You may add or change your direct deposit
information any time by logging into Member
Access or completing a Direct Deposit Authorization
(Form 7204).
Taxes The taxable portion of your monthly benefit is
subject to federal and state income taxes. Since tax
laws are complex and constantly changing, be sure
to check with an accountant or a tax advisor about
your tax liability, or visit the IRS’s website at
www.irs.gov and the website for the tax agency in
the state in which you reside. In South Carolina, visit
the South Carolina Department of Revenue’s
website at https://dor.sc.gov.
Additional information for disability
retirees
If you are a PORS member who is receiving a
disability benefit, the disability benefits paid to you
from PEBA are reported annually on IRS Form 1099-
R as normal distributions for income tax purposes.
This is in accordance with IRS guidelines, which also
direct usage of various codes to reflect the taxability
of a payment, or distribution, for income tax
purposes. PEBA is required to use a code “7” in box
7 of your Form 1099-R rather than a code “3”
because the disability program for PORS members is
an occupational or job-related disability program
rather than a total and permanent disability
program as described in section 72(m)(7) of the
Internal Revenue Code. A code “7” in box 7 of your
Form 1099-R means that you are not subject to the
10 percent tax penalty for early withdrawal because
you receive your retirement benefits through a
monthly benefit; however, these benefits should be
included as ordinary income for tax purposes.
Although the Form 1099-R you receive from PEBA
correctly contains a code “7” in box 7, you may also
receive monthly benefits from the Social Security
Administration and be considered totally and
permanently disabled for Social Security purposes.
If you are considered totally and permanently
disabled for Social Security purposes, you may
qualify for the Credit for the Elderly or the Disabled.
Please refer to Schedule R when completing your
tax return. You must keep for your records a copy of
your physician’s statement, which certifies that you
were permanently and totally disabled on the date
that you retired.
Benefit adjustments Per current state law, effective each July 1, eligible
PORS retirees are to receive an annual benefit
adjustment of 1 percent of their annual benefit up
to a maximum of $500 per year. The increase will be
reflected in benefit payments issued on the last
business day of July since benefits are payable the
last business day of the month. The earliest you can
receive a benefit adjustment is the second July 1
after your date of retirement.
Police Officers Retirement System Member Handbook
19
Non-working retired member
incidental death benefit As a non-working retiree, if you die and your last
employer prior to retirement provides incidental
death benefit coverage (see Page 7), a payment
based on your service credit will be paid to your
beneficiaries as follows:
Class Two members’ years of
service credit
Class Three members’ years of
service credit
Incidental death
benefit payment
10 to 19 years of service credit
10 to 19 years of service credit
$2,000
20 to 24 years of service credit
20 to 26 years of service credit
$4,000
25 or more years of service
credit
27 or more years of service
credit $6,000
Amounts paid to your beneficiary are considered
taxable benefits; therefore, federal taxes will be
withheld unless your beneficiary rolls over the
money into another qualified retirement plan. It is
up to your beneficiary to request that state taxes be
withheld from the payment.
Returning to covered
employment To retire, you must first have a complete, bona fide
severance or termination of employment. After 30
days of retirement, you may be hired by an
employer covered by one of the retirement systems
administered by PEBA. If you return to covered
employment sooner than 30 consecutive calendar
days after retirement, your monthly benefit will be
suspended while you remain employed by a
covered employer.
Earnings limitation
From covered employment: service
retiree
If you retire before you reach age 57 and return to
covered employment, you will be subject to a
$10,000 per year earnings limitation. This means
you can earn up to $10,000 per year from covered
employment and continue to receive your
retirement benefit. If you continue covered
employment after earning more than $10,000 in a
calendar year, your monthly retirement benefit will
be suspended for the remainder of that year. The
$10,000 earnings limitation applies regardless of
your age when you return to covered employment.
For example, if you retire at age 54 with 27 years of
service and return to covered employment when
you are 59 years old, you would still be subject to
the $10,000 earnings limitation since you retired
before you reached age 57.
The $10,000 earnings limitation from covered
employment does not apply to members who
retired prior to January 2, 2013, or members who
retire after age 57. In addition, the limitation does
not apply to compensation for service as an elected
official, service as an appointee of the Governor
with confirmation by the South Carolina Senate or
service by appointment or election by the General
Assembly.
From all employment: disability retiree
Please see the Returning to employment while
receiving a disability retirement benefit section on
Page 10 for information about the calendar year
earnings limitation for disability retirees.
Employment status Any retired member who is employed by an agency
that adheres to state personnel policies will be
exempt from the State Employee Grievance
Procedure Act. This means your employment is at
will. If, as a retired member, you return to work for
an employer that is not governed by state
Police Officers Retirement System Member Handbook
20
personnel policies, you would be subject to your
employer’s policies regarding employment status
and rights.
Working 48 continuous months If you return to employment and work 48
continuous months for a covered employer with an
annual earnable compensation of at least 75
percent of the AFC used to calculate your monthly
benefit, you may elect to cease your monthly
benefit and become an active member of PORS (or
SCRS, if applicable). If you become an active
member again, you have the option to repay some
or all retirement benefits to receive additional
service credit for that period of time. When you
subsequently retire, your monthly benefit will be
calculated as if you were retiring for the first time.
TERI participation does not count toward the 48-
month period. If you begin this process for the
purpose of establishing eligibility for retiree health
insurance, please contact PEBA for assistance.
Working retired member
incidental death benefit If you are a working retired member and your
employer participates in incidental death benefit
coverage, a payment equal to your current annual
earnable compensation will be paid to your
beneficiary if you die while in service. Amounts paid
to your beneficiary are considered taxable benefits;
therefore, federal taxes will be withheld unless your
beneficiary rolls over the money into another
qualified plan. It is up to your beneficiary to request
that state taxes be withheld from the payment.
Working retired member
contribution rate If you return to work for a covered employer after
you retire, you will contribute the same tax-
deferred percentage of your gross pay into your
PORS retirement account as an active member. The
member contribution rate is 9.75 percent. As a
working retiree, you will not earn additional service
credit or receive interest on your account.
Beneficiary and payment
option changes
Retired member incidental death
benefit
You may change your beneficiary for the incidental
death benefit at any time regardless of the payment
option you selected.
Option A
You may change your beneficiary for retirement
benefits at any time. If you have a change in marital
status (death of spouse, marriage, divorce), you
may also select a new payment option within five
years of the qualifying event.
Option B and Option C
If all of your beneficiaries predecease you, your
monthly benefit will revert to Option A effective in
the month following the month the last beneficiary
died. You must notify PEBA upon the death of a
beneficiary. You may then designate a new
beneficiary under Option A.
If you have a change in marital status (death of
spouse, marriage, divorce), you may also select a
new payment option and designate a new
beneficiary within five years of the qualifying event.
Payment option change limitation
Your form of monthly payment may not be changed
more than twice regardless of the number of events
(death of a designated beneficiary or change in
marital status) that occur. A reversion to Option A
after the death of your beneficiary will count as one
of the two changes. If a second beneficiary
predeceases you after you have again selected
Option B or Option C, you will revert automatically
to Option A; however, no further form of payment
changes will be allowed. Changes in form of
Police Officers Retirement System Member Handbook
21
payment occurring before January 1, 2001, are not
included in the limitation provision.
More information
Be sure to visit PEBA’s website at www.peba.sc.gov
for additional information, resources and tools. You
can also estimate your retirement benefit in
Member Access.
PEBA uses various social media platforms to
communicate with employers, members, the media
and other stakeholders. We invite you to take
advantage of these communications tools by liking
us on Facebook and following us on Instagram,
Twitter, YouTube and Podbean. We encourage you
to join the conversation.
You may also contact PEBA by telephone at
803.737.6800 or 888.260.9430, by email at
www.peba.sc.gov/contactus.html or via live chat by
clicking on the Customer Service Chat Now button
at the top of the PEBA home page. Please note that
PEBA does not answer questions about a specific
individual’s benefits through Live Chat.
SCPEBA 062018 | Expires 06302019Data classification: public information
202 Arbor Lake DriveColumbia, SC 29223
803.737.6800 | 888.260.9430www.peba.sc.gov
This document does not constitute a comprehensive or binding representation regarding the employee benefits offered by the South Carolina Public Employee Benefit Authority (PEBA). The terms and conditions of the retirement benefit plans offered by PEBA are set out in the applicable statutes and are subject to change. Please contact PEBA for the most current information. The language used in this document does not create any contractual rights or entitlements for any person.